HUD has published the FY 2026 Operating Cost Adjustment Factors (OCAFs), which are used to adjust contract rents for eligible Project-Based Section 8 and Project-Based Voucher (PBV) contracts. These adjustments reflect changes in operating costs and apply to upcoming contract anniversaries.

HUD’s FY 2026 OCAFs are now available and will be used to adjust contract rents for eligible properties.

Quick Facts:

• Who: Project-Based Section 8 and eligible PBV contracts
• When: Contract anniversaries on or after February 11, 2026
• Purpose: Reflect changes in operating costs
• National Average OCAF: 5.1%
• By State: OCAFs vary by state and territory
• Limit: OCAFs cannot be negative
• Applies To: Operating expense portion of rent only (not debt service)

System Update Confirmation

HUD has now:

• Updated FY 2026 OCAF rates in iREMS
• Published the 2026 Utility Allowance Factors (UAFs) on HUD USER

As a result, Auto OCAF rent adjustment letters can now be generated and issued for eligible contracts.

HUD Processing Flexibility Reminder

Per HUD’s February 4, 2026 memorandum, the requirement for Account Executive (AE) review of rent increases equal to or exceeding 5% is temporarily suspended for FY 2026.

• Contract Administrators may process Auto OCAF rent adjustments without AE review
• Applies to annual renewals and multiyear contracts that are eligible for and elect Auto OCAF

PBCA Compliance Reminder:

• Apply the correct FY 2026 OCAF based on the project’s state
• Apply OCAF only to operating expenses
• Confirm the contract anniversary date is on or after 2/11/2026
• Negative adjustments are not permitted
• Maintain supporting documentation in the contract file
• Review renewal submissions carefully to avoid processing delays

Public Comment Details:
HUD is accepting public comments on the OCAF methodology through April 6, 2026. Comments will be considered for FY 2027 and will not affect FY 2026 OCAFs.

Review your project’s FY 2026 OCAF and prepare for upcoming contract renewals.

HUD Utility Allowance Factors (UAFs): 2026 Update

The Department of Housing and Urban Development’s (HUD) Office of Housing permits owners and agents of multifamily housing properties to use Utility Allowance Factors (UAFs) for projects subject to the requirements of Housing’s Utility Analysis Notice.

The notice explains when owners and agents may apply published UAFs to adjust existing utility allowances. These factors allow for standardized adjustments rather than completing a full utility analysis, when permitted.

The UAF dataset is updated once per year and published with an official effective date. The data is based on information from the U.S. Energy Information Administration and the Bureau of Labor Statistics.

Owners and agents are responsible for determining the appropriate utility and state specific UAF and applying the published factor to the existing utility allowance being adjusted.

HUD has posted updated Utility Allowance Factors that may be used for utility allowance adjustments effective February 11, 2026, and later. You can only use the newly published UAFs for utility allowance adjustments that take effect on or after February 11, 2026, and only if your property is allowed to use UAFs under HUD rules.

Review the updated UAFs to determine whether they may be used for your property’s upcoming utility allowance adjustments.